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Conversion Services International Announces Adjustment of Financial Statements Related to the Accounting of Warrants issued in 2004; No Impact on Revenues or Cash Items
EAST HANOVER, N.J., November 21, 2005 -- Conversion Services International, Inc. (AMEX: CVN), a premier professional services firm exclusively focused on delivering the value in strategic business intelligence, data warehousing and data management solutions to Global 2000 organizations and other businesses, today announced that it restated the manner in which Conversion Services International, Inc. ("CSI") recorded and accounted for the issuance of certain warrants in 2004.
CSI had previously accounted for these warrants by calculating the fair value of the warrants using an option pricing model, and attributing a portion of the underlying debt associated with the warrants by recording the value of the warrants as a component of stockholders' equity and a corresponding reduction of the debt. As a result of the issuance of a registration rights agreement that included a liquidated damages clause, which linked to an effective registration of such securities, the value of these warrants is now reflected as a financial instrument in the current liabilities section of the restated Condensed Consolidated Balance Sheet. These adjustments have no impact on revenues or on any cash items.
The determination to change CSI's accounting for these warrants was made by the Board of Directors and the Audit Committee of CSI upon the recommendation of management and was discussed with CSI's independent registered public accounting firm, Friedman LLP. Additional information can be found in the Company's Current Report on Form 8-K, its three amended Quarterly Reports on Form 10-QSB/A for the quarters ended September 30, 2004, March 31, 2005 and June 30, 2005, and its amended Annual Report on Form 10-KSB/A for the year ended December 31, 2004 being filed with the SEC today.
About Conversion Services International, Inc.
A Note on Forward-Looking Statements
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